Key Points
- Bitcoin hit a record $106,000 following Trump’s comments about a U.S. crypto reserve. The U.S. already holds 200,000 bitcoins, valued at over $20 billion.
- Trump has embraced cryptocurrencies to make the U.S. a global crypto leader.
- Russian President Putin highlighted cryptocurrencies as alternatives to the U.S. dollar.
- Federal Reserve Chair Powell and analysts urged caution on implementing a bitcoin reserve. Bitcoin’s value has risen over 50% since Trump’s election victory.
Bitcoin surged past $106,000 on Monday, setting a new record high after President-elect Donald Trump hinted at plans to establish a U.S. bitcoin strategic reserve, drawing parallels to the country’s strategic oil reserves. The announcement energized the cryptocurrency market, with Bitcoin reaching $106,533 before settling at $104,462, up 3.2% for the day. Ether, the second-largest cryptocurrency, also rose 1.5% to $3,965.
Tony Sycamore, an analyst at IG, described the market as being in “blue sky territory,” noting the absence of the anticipated pullback. Investors are now eyeing $110,000 as the next significant milestone. The sentiment was further bolstered by including MicroStrategy in the Nasdaq-100 index, which is expected to attract more investment into the bitcoin-heavy software firm.
Trump’s comments during a recent CNBC interview added fuel to the rally. He expressed a commitment to making the U.S. a leader in cryptocurrency. When asked about creating a bitcoin reserve, Trump responded affirmatively, signaling a potential shift in U.S. policy towards digital assets.
According to CoinGecko, the U.S. currently holds around 200,000 bitcoins worth over $20 billion, making it a significant player in cryptocurrency alongside countries like China, Bhutan, and El Salvador. Russian President Vladimir Putin highlighted the growing global interest in cryptocurrencies as nations seek alternatives to the U.S. dollar, citing its political use as a reserve currency.
Despite the optimism, Federal Reserve Chair Jerome Powell compared bitcoin to gold, emphasizing its speculative nature. Chris Weston of Pepperstone urged caution, noting that implementing a Bitcoin reserve would require significant planning and market communication.
Bitcoin has surged over 50% since Trump’s election victory on November 5, and the total cryptocurrency market value has doubled to $3.8 trillion this year. Trump’s administration has appointed pro-crypto figures, including David Sacks as an AI and cryptocurrency czar and Paul Atkins to lead the SEC.
